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External Costs of Freight Transport – Relevance and Implications of Internalisation at the European Level
Numerous negative external effects are associated with the transport of goods. Due to the lack of internalising them in transport prices, too many goods are transported over too long distances. Several approaches are taken to reduce external costs, such as bans, regulations, taxes, levies and tradable permits. In some areas, however, such interventions are impractical to implement or do not exist at all. At the EU level external costs associated with the transport of goods are only partially reflected in transport prices. Applying a quantitative model, the analysis investigates a scenario of a coordinated EU approach to internalise external transport costs of extra-EU trade activities. The results reveal a positive effect on real GDP and employment in the EU, provided that the revenues from these trade surcharges are recycled back into the economy. Policy options to achieve that transport prices reflect social costs are identified in the analysis.
JEL-Codes:F18, D62, O52, R15, R41, R48
Keywords:External costs, internalisation, freight transport, international trade, quantitative model analysis, EU
Forschungsbereich:Industrieökonomie, Innovation und internationaler Wettbewerb – Strukturwandel und Regionalentwicklung – Umwelt, Landwirtschaft und Energie